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Big Changes For 2018!

With both the House and Senate recently passing the proposed tax reform legislation, big changes are in store for business and individual taxpayers in 2018. A full discussion of the impact of these changes is beyond the scope of this article, but here are a few of the highlights:

Individuals:

- The standard deduction is raised to $12,000 for single taxpayers and $24,000 for married taxpayers that file a joint return

- A $10,000 cap on the itemized deduction for state and local income taxes

- An overhaul of the tax brackets, resulting in 7 tax brackets ranging from 10% to a top rate of 37%

- A 20% deduction for "pass-through" income

- The child tax credit is increased to $2,000

- An incresease the AMT exemption

Businesses:

- A cut in the top corporate rate from 35% to 21%

Given the sweeping nature of these changes, the challenge for taxpayers and their advisors is to how best to determine the impact on 2018 taxes for a particular taxpayer. Unfortunatley, there is no simple answer of whether or not these changes will be beneficial or harmful to a given taxpayer without taking into account each of the changes brought about by the law. Please consult your tax advisor for the potential impact the changes to the tax law may have on you and the amount of federal income tax you pay.

IRS CIRCULAR 230 DISCLOSURE

This notice is meant to comply with I.R.S. requirements. Any federal tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, to avoid penalties that may be imposed on the taxpayer under the Internal Revenue Code or to promote, market or recommend to another party any tax-related matter.